China Gold Tax: How VAT Works in the Chinese Gold Market

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Mainland China taxes gold at 13% VAT, its standard rate, but not at every stage of the market. Gold traded between members of the Shanghai Gold Exchange (SGE) is exempt from VAT. The tax only applies once gold leaves the exchange system on its way to jewellers, retailers and consumers. Imports are restricted as well. Only banks and institutions licensed by the People’s Bank of China may bring gold into the country, and almost all of it passes through the SGE.

That system changed on 1 November 2025. A joint announcement from the Ministry of Finance and the State Taxation Administration split VAT treatment by what the gold is used for. Gold withdrawn from the exchange for investment keeps its favourable treatment. Gold withdrawn for other uses, chiefly jewellery making, now earns a VAT deduction of only 6% of its cost instead of the full 13%. The change was widely reported as China ending its gold tax break, and it pushed up costs for jewellers across the country. The new rules apply until 31 December 2027.

Selling gold can be taxed too. Under China’s income tax law, an individual who sells gold at a profit is liable to 20% tax on the gain as property transfer income. In practice, collection from occasional private sellers has been lenient.

This guide covers how VAT applies to gold in China, how the SGE exemption and VAT invoices work, the November 2025 changes, the rules on importing gold, and how individuals are taxed when they buy and sell. It also explains how VAT affects the SGE’s silver price. It sits alongside our guides to Gold Tax and VAT Across Asia, the Chinese gold market and the Shanghai Gold Exchange.

Please note that BullionStar does not provide investment, financial or tax advice. The information below is for informational purposes only and reflects the rules in force as of October 2026. Tax rules change, and your individual circumstances will always be the most important factor, so please check with a qualified tax adviser before acting on it.

This guide is based on research originally published by precious metals analyst Koos Jansen for BullionStar, and has been updated to reflect the current rules.

China’s VAT on Gold

Gold in mainland China falls under value-added tax (VAT), the country’s main tax on goods. China’s standard VAT rate is 13%, and it applies to gold jewellery, gold products and most gold sold to consumers. The rate has been cut twice since 2018. It was 17% until 1 May 2018, then 16%, and has been 13% since 1 April 2019.

What makes gold different is that the tax doesn’t apply evenly along the supply chain. China’s tax rules carve out the wholesale market, where gold trades through the Shanghai Gold Exchange and the Shanghai Futures Exchange. Most of the VAT on gold is collected after the metal leaves that system.

Standard Gold and Investment Gold

The exemptions turn on two definitions.

Standard gold is gold in the specific forms traded on China’s exchanges: bars and ingots of 99.99%, 99.95%, 99.9% or 99.5% purity, in sizes of 50 grams, 100 grams, 1 kilogram, 3 kilograms or 12.5 kilograms.

Investment gold, as defined in the November 2025 rules, means gold sold directly or made into bars and ingots of at least 99.5% purity, or into legal tender gold coins approved by the state.

Everything else, including jewellery, industrial gold and most gold products, counts as non-investment use.

How Gold Is Taxed at Each Stage

Stage	VAT treatment
Standard gold traded between members on the SGE or Shanghai Futures Exchange	Exempt
Standard gold withdrawn from the exchange for investment	VAT charged, then immediately refunded to the member, with related surcharges waived
Standard gold withdrawn from the exchange for non-investment use, such as jewellery	Exempt at withdrawal, but buyers can only deduct input VAT at 6% of the invoice amount
Standard gold sold outside the exchanges	13%
Gold jewellery and gold products sold to consumers	13%
Non-standard gold and gold ore sold by producers and dealers	Exempt

The pattern is deliberate. Gold that stays within the exchange system, or leaves it as investment gold, carries little or no VAT. Gold that becomes jewellery or is sold outside the system pays the full rate somewhere along the chain. How that works in practice, and how it changed in November 2025, is explained below.

How VAT Works Through the Shanghai Gold Exchange

The Shanghai Gold Exchange sits at the centre of China’s gold market. Gold mined in China, and almost all gold imported into it, is sold through the exchange, and its members buy from it to supply banks, jewellers and manufacturers. China’s VAT rules on gold are designed around this structure. Gold is taxed lightly while it stays inside the exchange system, and the tax is settled when the metal leaves.

Trading on the Exchange

When members or their clients trade standard gold on the SGE or the Shanghai Futures Exchange, the seller pays no VAT. Gold can change hands many times on the exchange without any VAT being charged, which is why the SGE’s gold prices are quoted without tax.

Gold traded on the SGE’s international board is held in a vault in the Shanghai Free Trade Zone, which is treated as outside China for customs purposes, so it stays outside the domestic market unless it’s imported into mainland China.

Withdrawing Gold from the Exchange

VAT comes into play when gold is physically withdrawn from the exchange’s vaults. Since November 2025, the member must declare what the gold will be used for before it’s withdrawn, and the tax treatment depends on that answer.

Gold withdrawn for investment, to be sold as bars, ingots or legal tender coins, is charged VAT that’s immediately refunded to the member. The member receives a special VAT invoice for the gold. When it sells the gold on, it charges VAT on the sale and deducts the VAT shown on that invoice, so in practice the tax falls mainly on the member’s margin rather than on the value of the gold itself.

Gold withdrawn for any other use, such as jewellery making or industry, is exempt from VAT at the point of withdrawal. The buyer receives an ordinary invoice rather than a special one, and can only claim a deduction of 6% of the invoice amount when it later sells the finished product. Before November 2025, all withdrawals were treated in the same way as investment gold.

A member can change the declared use only once, within six months of withdrawal. Breaking the rules can lead to suspension of VAT refunds for three to six months.

VAT Invoices

The type of invoice matters as much as the rate. In China’s VAT system, a business can only deduct the VAT it paid on purchases if it holds a special VAT invoice (增值税专用发票) or a customs receipt for import VAT. An ordinary invoice (普通发票) records the sale but doesn’t normally carry a right to deduct. By issuing ordinary invoices for gold withdrawn for non-investment use, and setting a fixed 6% deduction rate, the November 2025 rules cut the tax credit available to jewellers without changing the headline 13% rate.

A Worked Example

The figures below are illustrative. They follow a jeweller buying 1 kilogram of gold on the SGE at 1,000 yuan per gram, turning it into jewellery, and selling it at 1,200 yuan per gram before VAT.

	Before November 2025	Since November 2025
Gold bought on the SGE	1,000,000 yuan, no VAT charged	1,000,000 yuan, no VAT charged
Invoice received on withdrawal	Special VAT invoice	Ordinary invoice
Input VAT the jeweller can deduct	115,044 yuan (13% VAT included in the price)	60,000 yuan (6% of the invoice amount)
Output VAT on jewellery sold for 1,200,000 yuan	156,000 yuan	156,000 yuan
VAT the jeweller pays	40,956 yuan	96,000 yuan

On the same kilogram, the jeweller’s VAT bill more than doubles, rising by about 55,000 yuan, or around 5.5% of the gold’s cost. Most of that increase is passed on to customers in the price of jewellery.

Silver on the SGE

Silver is treated differently from gold. The gold exemptions don’t extend to it, so silver traded on the SGE carries China’s 13% VAT, and the exchange’s silver prices, such as Ag(T+D), include VAT. To compare the SGE silver price with international silver prices, which carry no tax, divide it by 1.13. A Shanghai silver price that looks 15% above the London price is only around 2% higher once VAT is taken out. Gold needs no such adjustment, because SGE gold prices already exclude VAT.

China’s November 2025 Gold Tax Change

On 1 November 2025, China’s Ministry of Finance and State Taxation Administration changed how gold bought through the country’s exchanges is taxed. News reports around the world described it as China ending its gold tax break. That’s broadly accurate for jewellers, but not for investors.

What Changed

Until November 2025, every business buying gold through the Shanghai Gold Exchange received the same tax treatment, whatever it planned to do with the gold. It could claim back the full 13% VAT when it later sold the finished product, effectively a tax credit on the gold itself. Under the new rules, that full credit only applies to gold that will be sold as investment bars, ingots or coins. Gold bought for jewellery or industrial use now earns a credit of only 6%. The rules apply until 31 December 2027.

Why China Made the Change

The government presented the change as a way to make the gold market more orderly. It separates gold bought as an investment from gold bought as a consumer product, and gives a clear tax advantage to gold traded through regulated exchanges. Analysts also saw it as a way to raise revenue and to steer more of China’s huge gold demand onto the exchanges. UBS expected the main effect to be higher costs for jewellery and industrial users.

Who Is Affected

Jewellers and jewellery buyers bear most of the change. A smaller tax credit means a bigger VAT bill on every gram of gold a jeweller sells, and most of that cost reaches customers. Investors are largely unaffected. Gold bars and coins bought from banks and other exchange members keep the same treatment as before. Trading gold on the exchange without taking physical delivery remains VAT-free.

How the Market Reacted

Shares in China’s big jewellery retailers fell sharply on the first trading day after the announcement. Chow Tai Fook dropped as much as 12% and Laopu Gold as much as 9%. Over the following months, Chinese buyers shifted from jewellery to investment gold. World Gold Council figures show Chinese jewellery demand in the fourth quarter of 2025 fell 23% from a year earlier, to its lowest fourth quarter since 2008. Demand for bars and coins rose 42% to a record 119 tonnes.

What Happens After 2027

The new rules are set to expire on 31 December 2027. China could renew them, change them or let them lapse, and no decision has been announced. This guide will be updated when the government confirms what happens next.

Importing Gold into China

China tightly controls the movement of gold across its borders. For businesses, imports are limited to a short list of licensed institutions. For travellers, the rules are simpler, but larger amounts must be declared.

Who Can Import Gold

Only banks and companies holding an import licence from the People’s Bank of China may bring gold into the country commercially. The list is short. It’s made up mainly of China’s largest state-owned banks and a handful of foreign banks with Chinese subsidiaries, along with a few mining companies that have been granted their own permits. Imported standard gold must then be registered and sold through an approved exchange, usually the Shanghai Gold Exchange. That’s why almost all of China’s imported gold passes through the SGE before reaching the market.

The central bank also controls the volume. Licences cover a set quantity of gold over a fixed period, and the People’s Bank of China decides how much is approved. In September 2025, it proposed loosening the paperwork, with longer-lasting licences and more customs offices able to handle gold. The central bank still has the final say on how much comes in.

Exporting gold is even more restricted. Gold can’t generally be exported from mainland China under normal trade, which means gold flows into China far more easily than it flows out. Our guide to Chinese cross-border trade rules on gold explains the system in more detail.

Tax on Imported Gold

Gold imported by licensed institutions isn’t charged import VAT. That treatment dates back to China’s original gold tax rules of 2002. VAT is then handled through the exchange system described above, so imported gold is taxed the same way as gold produced in China.

Bringing Gold into China as a Traveller

Individuals don’t need a licence to carry gold into or out of China. That requirement was scrapped in 2014. However, travellers carrying more than 50 grams of gold or gold products, including jewellery, bars and coins, must declare it to customs on arrival. When leaving China, travellers must declare gold above 50 grams, or more than they declared on entry. Undeclared gold can be confiscated, and Chinese customs regularly reports seizures of gold bars hidden in luggage.

For anyone buying gold in Hong Kong and taking it across the border, the declaration rules apply at the mainland checkpoint, even though no tax was paid in Hong Kong.

What China’s Gold Tax Means for Buyers

For most private buyers in China, the tax rules come down to one question: what kind of gold are you buying? Investment gold carries very little tax beyond the dealer’s margin. Jewellery carries the full 13% VAT, and since November 2025 more of that tax reaches the shop price.

Buying Gold Bars and Coins

Investment bars and coins sold by Chinese banks and other exchange members get the most favourable tax treatment. The banks buy their gold through the Shanghai Gold Exchange and can offset almost all the VAT on the gold itself. That leaves tax mainly on their own margin. The November 2025 changes left this treatment in place, which is one reason Chinese demand for bars and coins rose to a record in the months that followed.

Buying Gold Jewellery

Gold jewellery is sold with 13% VAT included in the price, as it always has been. What changed in November 2025 is how much of that tax jewellers can offset against the gold they buy. With a smaller credit, their costs rose, and most of the increase is passed on in jewellery prices. Jewellery prices in China also include labour charges, which are much higher in percentage terms than the premium on an investment bar. Together, the two make jewellery a far more expensive way to hold gold.

Trading Gold Without Taking Delivery

Gold that’s bought and sold within the exchange system without being withdrawn carries no VAT at all. Many Chinese banks offer accounts that link to the Shanghai Gold Exchange or let customers build up gold in small amounts. As long as the gold isn’t taken out as physical metal, no VAT applies. The trade-off is that you don’t hold the gold yourself. You hold a claim on gold in the bank’s or the exchange’s custody.

Selling Gold: Tax on Gains

Selling gold at a profit can also be taxed. China’s individual income tax law treats gains from selling property as property transfer income, taxed at a flat 20%, and that covers gold. In practice, collection from private individuals who sell gold occasionally has been lenient, and the tax is rarely applied to small or one-off sales. Anyone buying and selling gold regularly, or in large amounts, should assume the gain is taxable.

Frequently Asked Questions

What is the VAT rate on gold in China?

China’s VAT rate on gold is 13%, the country’s standard rate. It applies to gold jewellery, gold products and gold sold outside the official exchanges. Standard gold traded between members of the Shanghai Gold Exchange is exempt, and investment bars and coins carry very little VAT beyond the seller’s margin.

Is gold traded on the Shanghai Gold Exchange VAT-free?

Yes. Standard gold traded between members of the Shanghai Gold Exchange or the Shanghai Futures Exchange is exempt from VAT. VAT only comes into play when gold is physically withdrawn from the exchange. Even then, gold withdrawn for investment has the tax refunded straight away.

Did China end its gold tax break in 2025?

Partly. From 1 November 2025, businesses buying gold through China’s exchanges for jewellery or industrial use can only offset 6% VAT against that gold, down from 13%. Gold bought for investment, including bars, ingots and legal tender coins, keeps its favourable treatment. In effect, the change ended the tax break for jewellers but not for investors.

When does China’s new gold VAT policy expire?

The gold tax rules introduced on 1 November 2025 apply until 31 December 2027. China hasn’t yet announced whether they’ll be renewed, changed or allowed to lapse after that date.

Is there import tax on gold in China?

Gold imported by banks and companies licensed by the People’s Bank of China isn’t charged import VAT, and it’s then taxed through the Shanghai Gold Exchange like gold produced in China. Only licensed institutions can import gold commercially. Travellers can bring gold into China without a licence, but must declare anything over 50 grams to customs.

Do you pay tax when selling gold in China?

In principle, yes. Gains from selling gold are taxed as property transfer income at a flat 20% under China’s individual income tax law. In practice, the tax is rarely collected from private individuals making occasional sales. Regular or large-scale sellers should expect it to apply.

Does the Shanghai Gold Exchange silver price include VAT?

Yes. Unlike gold, silver traded on the Shanghai Gold Exchange carries China’s 13% VAT, and the exchange’s silver prices include it. To compare the Shanghai silver price with international prices, divide it by 1.13. SGE gold prices don’t include VAT.

Buying Gold Outside China

China’s gold tax system is built around the Shanghai Gold Exchange. Gold that stays inside the exchange system, or leaves it as investment bars and coins, carries little VAT. Jewellery carries the full 13%, and since November 2025 jewellers have been able to offset much less of it. Imports are limited to licensed institutions, and gains on selling gold are taxable in principle at 20%. For a private buyer in China, the cheapest way to own gold is as investment bars or coins, not as jewellery.

Outside mainland China, the picture is simpler. In Hong Kong and Singapore, investment gold carries no VAT or GST, no import duty and no capital gains tax. Gold bought in either place and then taken into mainland China still has to be declared at the border, so buyers in China gain little from buying outside the country. For international investors, though, the difference is significant. Singapore adds political neutrality and a long record of stable rule of law, while Hong Kong’s gold market is increasingly tied to mainland China’s. Our guide to Gold Tax and VAT Across Asia compares the rules across the region.

In Singapore, investment-grade gold is exempt from GST under the Investment Precious Metals rules. Browse our range of gold bullion, hold it in your own name with vault storage in Singapore, and sell it back at live prices whenever you choose. For more on how China’s gold market works, see our guides to the Chinese gold market and the Shanghai Gold Exchange. If you have questions, our team at support@bullionstar.com will be happy to help.